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Corporate social responsibility in India - An Effort to bridge the welfare gap

Author

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  • Jayati Sarkar

    (Indira Gandhi Institute of Development Research)

  • Subrata Sarkar

    (Indira Gandhi Institute of Development ResearchInstitute of Economic Growth)

Abstract

Drawing on existing theoretical and empirical literature on the rationale behind Corporate Social Responsibility (CSR), this paper analyses the potential implications of mandated CSR under the recently enacted Companies Act, 2013 in India on firm incentives, likely responses of corporates that come under the ambit of the law, implications for resource availability and delivery of social goods, and the prospects and challenges of implementing mandated CSR. Insights into these issues are drawn by empirically examining the voluntary CSR behavior of a sample of 500 large companies listed on the Bombay Stock Exchange for the period 2003-2011 that predates the new regulation. The paper argues that notwithstanding the potential economic costs that may accompany mandated CSR, the provisions of the new Act are designed thoughtfully to balance the objectives of the corporation and its shareholders on the one hand and that of the society and its stakeholders on the other. However, addressing the challenges of implementation successfully would determine how far the objectives of the new regulations are met.

Suggested Citation

  • Jayati Sarkar & Subrata Sarkar, 2015. "Corporate social responsibility in India - An Effort to bridge the welfare gap," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-023, Indira Gandhi Institute of Development Research, Mumbai, India.
  • Handle: RePEc:ind:igiwpp:2015-023
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2015-023.pdf
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    References listed on IDEAS

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    1. Hess, David & Dunfee, Thomas W., 2007. "The Kasky-Nike Threat to Corporate Social Reporting: Implementing a Standard of Optimal Truthful Disclosure as a Solution," Business Ethics Quarterly, Cambridge University Press, vol. 17(1), pages 5-32, January.
    2. Kotchen Matthew & Moon Jon J., 2012. "Corporate Social Responsibility for Irresponsibility," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-23, November.
    3. Besley, Timothy & Ghatak, Maitreesh, 2007. "Retailing public goods: The economics of corporate social responsibility," Journal of Public Economics, Elsevier, vol. 91(9), pages 1645-1663, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Sudershan Kuntluru, 2019. "Corporate Social Responsibility and Firm Performance: Indian Evidence," Working papers 332, Indian Institute of Management Kozhikode.
    2. Rania Beji & Ouidad Yousfi & Nadia Loukil & Abdelwahed Omri, 2021. "Board Diversity and Corporate Social Responsibility: Empirical Evidence from France," Journal of Business Ethics, Springer, vol. 173(1), pages 133-155, September.
    3. P. Kavitha, 2019. "Trends and Patterns of Corporate Social Responsibility Expenditure: A Study of Manufacturing Firms in India," Working Papers id:12995, eSocialSciences.
    4. Sudershan Kuntluru, 2019. "Corporate Social Responsibility and Firm Performance: Indian Evidence," Working papers 317, Indian Institute of Management Kozhikode.
    5. Kumar Ramesh & Raiswa Saha & Susoban Goswami & Sekar & Richa Dahiya, 2019. "Consumer's response to CSR activities: Mediating role of brand image and brand attitude," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(2), pages 377-387, March.

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    More about this item

    Keywords

    Corporate social responsibility; firm incentives; social welfare; efficiency; regulation; enforecment;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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